Even in a solid economy, there’s still competition to contend with; in times of recession, businesses have to work harder to capture or retain customers who have less resources to spend. Shifting your sales and marketing focus uses two strategies:
1. Work on doing what your competition does, but do it better.
This requires some analysis of the competition, which should be standard practice anyway. Ask yourself “What do I offer?” “What does my competition offer?” and “How can I add services or change the way I provide my services to make them more attractive to consumers?”
2. Change your marketing strategy to focus on your established customers.
This is your built-in base, and if you foster customer loyalty and redirect your marketing efforts to keep your customers motivated to continue to do business with you, you’ll save time, money and effort on growing your customer base in hard times, and you’ll prevent your competitors from taking business from you.
3. Adding value to your service or offering discounts and rewards for patronage are also ways to instil loyalty and thank your customers for their business.
That doesn’t mean that you shouldn’t continue try and attract new business; it simply means to redirect the bulk of your energies toward serving your base. Flexibility is important in any business cycle.
4. Allocate Your Money Wisely.
There’s a time to invest and a time to conserve. Look at the cost-effectiveness of options like outsourcing non-core functions versus retaining full-time staff for such things as IT and payroll processing. You can also look at the wisdom of leasing equipment instead of purchasing. Explore ways of generating free publicity in lieu of paying for advertising. Learn to deal with growth without hiring employees.
5. Plan Ahead.
If the last recession taught us anything, it’s that nothing can be taken for granted when it comes to the economy. Whether you’re a start-up or an established business, alongside your basic business plan and growth estimates, you should also have a plan of action for hard times. Sit down and look at challenges, and then brainstorm ways that you can overcome them. It’s also a good idea to pad your budget in certain areas to leave a little bit of wiggle-room in the event of a financial crunch.
6. Re-Evaluate Your Inventory and Inventory Management Practices.
Managing your inventory is tricky in the best of times; in a bad economy, goods on hand that you can’t move can increase. Implement inventory management software and take a look at options like reducing the number of products in your line to focus on the most essential or popular. You can also consider services like drop-shipping as a cost-cutting alternative to warehousing and shipping items yourself. Use technology like Automated Inventory Control and POS systems to keep tabs on your stock.
Explore alternative service providers, suppliers and other vendors to get a better price or more value for your money, without sacrificing the quality of your merchandise.
Shore Up Your Liquidity
7.Cash is king in any economy, but when times get tough, you need to keep your cash flow going.
Some business owners might be tempted to use credit to preserve cash on hand, but accruing new debt is a short-term solution. Pay down any debt when business is good, re-evaluate your budget to allocate funds more intelligently, and keep a financial buffer of cash reserves that you add to regularly in order to get you through the slow times with little stress or risk of business disruption.